The lawsuits accuse Facebook of having a monopoly.
A coalition of 48 public prosecutors led by New York’s Letitia James filed a new lawsuit against Facebook on Wednesday, claiming the company was stifling competition to protect its “monopoly power”.
The lawsuit follows the same day that the Federal Trade Commission filed a separate lawsuit against the social media giant and also accused it of anti-competitive practices.
“For nearly a decade, it has been using Facebook’s dominance and monopoly power to crush smaller rivals and stifle competition, all to the detriment of everyday users,” Attorney General James said in a statement. “Today, we are taking steps to stand up for the millions of consumers and many small businesses who have been harmed by Facebook’s illegal behavior.”
James said Facebook “used its power to suppress competition to take advantage of users and make billions by turning personal information into a cash cow.”
He added that almost every state in the nation has joined the bipartisan lawsuit, “because Facebook’s efforts to dominate the market were as illegal as they were harmful.”
In a separate lawsuit, the FTC alleged that the company had illegally maintained its “monopoly” through years of anti-competitive practices.
“Personal social networks play a central role in the lives of millions of Americans,” said Ian Conner, director of the FTC’s Office of Competition. “Facebook’s actions to preserve and maintain its monopoly deny consumers the benefits of competition. Our goal is to curb Facebook’s anti-competitive behavior and restore competition in order for innovation and free competition to flourish.”
He tweeted from Facebook’s official communications account to review the complaints.
“We’re reviewing the complaints and we’ll have more to say soon,” the company said. “Years after the FTC approved our acquisitions, the government now wants to take the matter over and ignore the precedent for the wider business community or the people who choose our products on a daily basis.
According to a lawsuit filed by attorneys attorneys in Washington DC on Wednesday, Facebook uses various methods to maintain its dominance – namely, acquiring smaller or potential rivals and clashing with third-party developers on its platform.
Consumers suffer from fewer online opportunities, and the power of Facebook only increases as it collects users ’personal information and uses it for business interests, according to a statement from James’ office.
The lawyers ’main lawsuit accused Facebook of violating Section 2 of the Sherman Act and Section 7 of the Clayton Act. He is asking the court to stop Facebook’s allegedly anti-competitive behavior and prevent it in the future. In addition, the coalition is calling for a ban on Facebook from making additional acquisitions of $ 10 million or more without prior notice to states. Finally, it seeks indefinite further relief.
The FTC lawsuit deepens Facebook’s acquisition of Instagram in 2012 and WhatsApp’s acquisition in 2014 as an example of exercising its monopoly, and the company is also accused of allegedly anti-competitive terms for software developers.
The FTC’s lawsuit is seeking a permanent order from the federal court, which may require Facebook to sell Instagram and WhatsApp. It is also working to get Facebook notified and approved for future mergers and acquisitions, as well as to eliminate its alleged anti-competitive conditions for software developers.
Jennifer Newstead, Facebook’s vice president and general counsel, told ABC News, “This is revisionist history.”
“Antitrust laws exist to protect consumers and promote innovation, not to punish successful businesses,” Newstead added. “Instagram and WhatsApp have become the incredible products they have today because Facebook has invested billions of dollars, years of innovation and expertise to develop new features and better experiences for the millions who enjoy these products.”
He continued: “The most important fact in this case, which the Commission does not mention in its 53-page complaint, is that it accounted for these acquisitions years ago. The government now wants to transfer itself and sends a cold warning to U.S. businesses that no sales “People and small businesses choose not to use Facebook’s free services and ads because they have to, but to use them because our apps and services are our greatest asset. We strongly protect people’s additional capabilities by making that decision.”